Toyota to invest US$1b in Grab's latest funding round

13 June 2018

Toyota was initially cautious about ride-sharing and autonomous-driving technology. This time, the automaker is lead investor in a financing round launched after Grab acquired Uber's operations in Southeast Asia, a region of 640 million people.

Toyota also has ties to Uber.

Toyota put money into Grab via its Next Technology Fund a year ago, but this time around the capital comes directly from the parent company.

Currently, Grab counts carmakers Toyota, Honda and Hyundai among its investors, as well as Chinese ride-hailing giant Didi Chuxing.

The two companies will look for future collaborations aimed to achieve more-efficient ride-hailing businesses and for developing future mobility service solutions and MaaS vehicles.

Grab called it the largest-ever investment globally by an automotive manufacturer in the ride-hailing sector. It raised $2.5 billion in its last round in July, resulting in a reported value of $6 billion.

A man walks past a Grab office in Singapore March 26, 2018.

Under the agreement with Toyota, one of the Japanese company's executives will join Grab's board of directors, and a Toyota employee will be seconded to the startup full-time as an executive officer. Six-year-old Grab faces fierce competition from Indonesian rival Go-Jek, which is expanding ride-hailing and other services in Southeast Asia.

The firm also offers online to offline services, such as food delivery and digital payments, which it aims to expand deeper into the region using funds from its latest financing round. The recorder, developed by Toyota for corporate fleets, has been installed in 100 Grab rental cars. This strong partnership will enable us to become the one-stop mobility platform in Southeast Asia.

"Together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia", he said. In addition, collaborations in driving-data-based automotive insurance, financial services for Grab drivers and maintenance services are also contemplated under the new partnership. Grab recently took over Uber's Southeast Asia operations after years of competition, and is now going head-to-head in Indonesia with rival Go-jek.

Last month, Indonesian ride-hailing and online payment firm Go-Jek said it would enter Vietnam, Thailand, Singapore and the Philippines in the next few months, investing $500 million in its worldwide push.

Founded in 2012 by Malaysian Harvard Business School graduates Anthony Tan and Tan Hooi Ling, Grab now dominates the third-party and private auto hailing markets across Singapore, Indonesia, Philippines, Malaysia, Thailand, Vietnam and Myanmar.